I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

04 Dec 2020

Trade in Vietnam is picking up as farmers are starting to deliver more coffee. The harvest of the new crop is picking up pace as weather conditions within the Central Highlands were more favourable over the last week. While in terms of volume of coffee that is due from this new crop, most of the forecasts vary between 27 million and 28 million bags.

Trade within Indonesia is slowing down due to limited supplies form the April 2020 to March 2021 coffee crop as well as the start of the end of year holidays. This, along with the internal competition between their growing domestic roasting and soluble manufacturers and the export market, is seen to be competing for what little coffee is being offered for the time being.

The January 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 58.18 usc/Lb. This equates to 48.85% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 18,676 bags yesterday, to register these stocks at 1,291,796 bags, with 93.9% of these certified stocks being held in Europe at a total of 1,213,036 bags and the remaining 6.1% being held in the USA at a total 78,760 bags. There was meanwhile a smaller number 17,750 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,800 bags.

It was a neutral day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar Cocoa and Coffee markets ended the day on a positive note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1130% lower; to see this index registered 436.6083.  The day starts with the U.S. Dollar, trading at 1.344 Sterling, at 1.214 the Euro and with the US Dollar buying 5.152 Real. 

The New York markets started the day yesterday trading on a modest firm note, quickly making early gains for the start of the day however the market soon hit a ceiling and dropped back off the highs of the morning trade to see the market set on a modest softer track for the remainder of the session, while the London market started the day yesterday trading on a modest softer note, the London market continued to oscillate around par for most of the morning session. As the afternoon progressed both markets, buoyed by a degree of buying support, gained momentum which saw the markets settle on a modest firm note for the day.

The London market ended the day on a modest positive note with 42.86% of the earlier gains of the day intact, while the New York market ended the day on a likewise modest positive note with 50% of the earlier gains of the day intact. This modest firmer close might inspire some degree of confidence to possibly set the markets for a hesitant start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT               NEW YORK ARABICA USc/Lb.

JAN 1346 + 3                                                 MAR 120.05 + 0.95
MAR   1371 + 7                                                      MAY   121.80 + 0.90
MAY   1383 + 7                                                     JUL 123.45 + 0.95
JUL   1399 + 7                                                       SEP    124.80 + 0.90
SEP    1415 + 6                                                        DEC     126.45 + 0.90
NOV   1431 + 6                                                      MAR    127.95 + 0.90
JAN   1446 + 6                                                       MAY   128.75 + 0.90
MAR   1461 + 6                                                       JUL   129.45 + 0.95